1983- James Koch 1985- Boston, MA Blitz-Weinhard Brewing 1995- NYSE 1998- Japan and Australia Over 30 different

t brews Product Diversification

Competitors:
Anheuser Busch InBev Molson Coor Brewing Company Heineken SABMiller

Sales by regional, micro and contract brewers grew by 17 percent High Start-up cost High yearly Maintenance and fixed asset cost The balance sheet for the Boston Beer Company shows that $144,889,000 was spent in property, plant, and equipment. Slow market growth Low switching cost

Who are the buyers?

Buyer volumes Ability to force down prices Ability to force higher quality

Ability to force more services

Availability of substitute products

Who is target market?

What does target market want?

How does the Boston Beer Company accomplish this? Can others accomplish the same task?

Focus of the Boston Beer Company

 Economy- being able to maintain a strong economic state in slow and down turning economic times Reputation- quality, safety, customer service, public relations Leadership- top level management and departmental managers Continual Growth- the ability to consistently outperform the previous year

 Differentiation:
Unique and valued product Over 30 different ales Beer, Hard Cider, Utopia 100% malted barley Value unable to be created by larger breweries

Focus:
Dedicated to flavor of beer Older male demographic Quality beer drinkers Twisted Teas and Utopia beer

Strengths
Micro Brewery Strong Marketing Position
Brand Equity Bargaining Power With Buyers

Weaknesses
Lack of Scale
Cost Leadership

Voluntary Recall

Dropped Third Parties

 Inbound Logistics
Hops Malt Pepper Cherries Coca Nibs Lemon Blackberries

Operations

Outbound Logistics
-Breweries in Boston, Cincinnati, and Pennsylvania - Two-year collaboration between Samuel Adams and Germanys Weihenstephan Brewery -Storing

 Marketing & Sales

Strong Marketing Position
Marketing tools

Boston Beer offers over 30 seasonal and year round, awardwinning styles of beer

 Service
Employee Training Customer Service

General Administration
Relationship with Stakeholders

Human Resources
Awards

 Technology
Quantitative Surveys MarketSight

Source: Boston Beer Company

Year Ending (December)(in Millions)
Gross Revenue Sales Returns and Allowances Excise Tax Receipts Revenue Total Revenue Cost of Revenue Cost of Revenue, Total Gross Profit Selling/General/Administrative Expense Advertising Expense Total Selling/General/Administrative Expenses Impairment-Assets Held for Use Unusual Expense (Income) Total Operating Expense +COGS Operating Income Interest Income - Non-Operating Interest/Investment Income - Non-Operating Interest Income (Expense) - Net Non-Operating Total Other Non-Operating Income (Expense) Other, Net Income Before Tax Total Income Tax Net Income

2005
263.3 0.0 -25.0 238.3 238.3 96.8 96.8 141.5 17.3 100.9 118.2 0.0 0.0 215.0 23.3 1.8 1.8 1.8 0.4 0.4 25.5 10.0 15.6

2006
315.3 0.0 -29.8 285.4 285.4 121.2 121.2 164.3 22.7 113.7 136.3 0.0 0.0 257.5 28.0 3.1 3.1 3.1 0.7 0.7 31.8 13.6 18.2

2007
380.6 0.0 -38.9 341.6 341.6 152.3 152.3 189.4 24.6 124.5 149.0 3.4 3.4 304.8 36.9 4.3 4.3 4.3 0.5 0.5 41.6 19.2 22.5

2008
449.6 -13.2 -37.9 398.4 398.4 214.5 214.5 183.9 35.0 132.9 167.9 1.9 1.9 384.3 14.1 1.6 1.6 1.6 0.2 0.2 15.8 7.8 8.1

2009
453.4 0.0 -38.4 415.1 415.1 201.2 201.2 213.8 36.9 121.6 158.5 1.0 1.0 360.8 54.3 0.1 0.1 0.1 0.0 0.0 54.4 23.2 31.1

2010
516.9 0.0 -36.2 480.7 480.7 217.1 217.1 263.6 41.4 144.7 186.1 0.0 0.0 403.2 77.5 2.5 2.5 2.5 0.4 0.4 80.4 35.4 45.0

Cash and Short Term Investments Total Receivables, Net Total Inventory Other Current Assets, Total Total Current Assets Property/Plant/Equipment - Net Other Long Term Assets, Total Total Assets

2005 63.9 9.5 13.6 2 89.2 26.5 3.4 119.1

2006 82.4 17.8 17 3.4 120.6 30.7 3.2 154.5

2007 95.5 20.1 18.1 4.3 137.9 46.2 13.9 198

2008 9.1 31.1 22.7 6 68.9 147.9 3 219.8

2009 55.5 22.6 25.6 9.4 113 147 2.9 262.9

Accounts Payable Accrued Expenses Notes Payable/Short Term Debt Other Current liabilities, Total Total Current Liabilities Other Liabilities, Total Total Liabilities Common Stock Additional Paid-In Capital Retained Earnings (Accumulated Deficit) Other Equity, Total Total Equity

11.4 15.6 0 3.4 28.7 4.3 33.1 0.1 70.8 15.6 -0.5 86

17.9 19.6 0 6.6 40.9 5 45.9 0.1 80.2 28.5 -0.2 108.6

17.7 20.4 0 44 60.2 4.2 64.4 0.1 88.8 44.9 -0.2 133.6

20.2 23.5 0 46.7 67.1 12.7 79.7 0.1 102.7 37.7 -0.4 140

25.3 21.4 0 54.2 73.8 16 89.8 0.1 111.7 61.7 -0.4 173.2

Total Liabilities & Shareholders Equity

119.1

154.5

198

219.8

262.9

Source: Boston Beer Company

 60% growth 06-10 in revenues Over 175% growth in Net Income EPS growth Current Ratio Operating Margin Acquisitions
Blitz-Weinhard Brewing Pennsylvania Brewing Co.

Net Income
$60,000,000.00

$50,000,000.00

$40,000,000.00

$30,000,000.00

$20,000,000.00

$10,000,000.00

$2006 2007 2008 2009 2010

Revenue Growth
80.00%

60.00%

40.00% Boston Beer

20.00%
Anheuser-Busch 0.00% 2007 -20.00% 2008 2009 2010 Molson Coors

-40.00%

-60.00%

 Maintain and conquer Marketing scheme adjustments Expansion into global market